Horizon PCS Announces Record Results for First Quarter Ended March 31, 2002; Subscriber Base Grows 15 Percent to 222,700.Business Editors CHILLICOTHE Chillicothe (chĭl'ĭkŏth`ē), city (1990 pop. 21,923), seat of Ross co., S central Ohio, on the Scioto River; inc. 1802. It is the trade and distribution center of a farm area that specializes in raising cattle and hogs and growing , Ohio--(BUSINESS WIRE)--May 13, 2002 Horizon PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. , Inc., a Sprint PCS (NYSE NYSE See: New York Stock Exchange :PCS) Network Partner, today announced record results for the first quarter ended March 31, 2002. Highlights for the first quarter include:
3 Months Ended
March 31,
--------------------
(in $000's) 2002 2001
---------- ---------
Total Revenues $48,210 $19,254
EBITDA (a) ($16,343) ($12,603)
EBITDAM $ 909 ($ 4,393)
Net Loss ($36,750) ($19,459)
Ending PCS Subscribers 222,700 84,681
Net PCS Subscriber Adds 28,600 18,234
PCS Churn 3.2% 2.3%
PCS ARPU $ 74 $ 80
(a) Excludes non-cash compensation charges
-- Net subscriber additions ("net adds") are expected to be 14,000 to 19,000.
-- ARPU, excluding roaming, is expected to be $56 to $57.
-- Churn, net of 30-day returns, is expected to be consistent or slightly
better than first quarter 2002
-- Roaming revenue is forecasted to be approximately $12 million to $14
million.
-- Roaming expense is projected to be approximately $9 million to $11 million.
-- EBITDA losses, excluding non-cash compensation charges, are forecasted to be
approximately $11 million to $14 million.
-- Capital expenditure guidance for 2002 is $60 million to $70 million.
Commenting on the results, William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack A. McKell, chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We are pleased to report that we met or exceeded our previous guidance for the first quarter in virtually every category. Net subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. additions were significantly higher than expected due to strong marketing efforts throughout our service territory. ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. , churn churn: see butter. , CPGA (Ceramic PGA) See PGA. CPGA - Ceramic Pin Grid Array , and roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. revenue and expense all were on target with our previous guidance. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
EBITDAM Earnings Before Interest, Tax, Depreciation, Amortization and Marketing (earnings before interest, taxes, depreciation, amortization and marketing) positive for the first time since our inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. ." EBITDA, excluding non-cash compensation charges, was negative $16.3 million for the first quarter of 2002 compared with negative $22.5 million for the fourth quarter of 2001. Capital expenditures were $23.4 million for the first quarter. At the end of the first quarter, Horizon had cash and cash equivalents of $195.9 million, which excludes restricted cash of $48.7 million. The Company also had a $95.0 million commitment under its bank credit facility. On May 8, 2002, Horizon entered into a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. agreement with its senior lenders in which the lenders waived the Company's non-compliance with the first quarter EBITDA covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the in the Company's senior secured credit agreement through June June: see month. 15, 2002, subject to related restrictions on the use of $105 million in loan proceeds on hand and on further borrowings. The Company is currently negotiating a modification A change or alteration in existing materials. Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. of its financial covenants for the future. For further details, please refer to Horizon's Form 10-Q Form 10-Q See 10-Q. to be filed tomorrow. Based on current preliminary information and internal projections, the Company's guidance for the second fiscal quarter of 2002 ending June 30, 2002, is as follows:
-- Net subscriber additions ("net adds") are expected to be 14,000 to 19,000.
-- ARPU, excluding roaming, is expected to be $56 to $57.
-- Churn, net of 30-day returns, is expected to be consistent or slightly
better than first quarter 2002
-- Roaming revenue is forecasted to be approximately $12 million to $14
million.
-- Roaming expense is projected to be approximately $9 million to $11 million.
-- EBITDA losses, excluding non-cash compensation charges, are forecasted to be
approximately $11 million to $14 million.
-- Capital expenditure guidance for 2002 is $60 million to $70 million.
First-Quarter Conference Call Schedule Horizon PCS will conduct a conference call tomorrow morning, May 14, 2002, at 11:00 a.m. Eastern time to discuss this press release. A live broadcast of the conference call will be available by dialing (913) 981-5509 or online at www.horizonpcs.com. To listen to the live call via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , please go to the web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours after the live call ends until May 16, either through the Internet site listed above or by dialing (719) 457-0820, and entering 492910 when prompted for the access code. About Horizon Horizon PCS is one of the largest Sprint PCS Network Partners, based on its exclusive right to market mobile communications network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. products and services under the Sprint brand name to a total population of over 10.2 million in portions of 12 contiguous Adjacent or touching. Contrast with fragmentation. See contiguous file. states. Its markets are located between Sprint PCS' Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Raleigh/Durham markets and connect or are adjacent to 15 major Sprint PCS markets that have a total population of more than 59 million. As a Sprint PCS Network Partner, Horizon offers the same national pricing plans and uses the same sales and marketing strategies and national distribution channels that have made Sprint the fastest growing wireless company in the country. For more information, visit the Horizon PCS web site at http://www.horizonpcs.com/. About Sprint Sprint operates the nation's largest all-digital, all-PCS wireless network, already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities across the country. Sprint has licensed PCS coverage of more than 280 million people in all 50 states, Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and the U.S. Virgin Islands. In mid- mid- pref. Middle: midbrain. 2002, Sprint will launch its 3G network nationwide and expects to deliver faster speeds and advanced applications on Sprint PCS 3G phones and devices. For more information on products and services, visit www.sprint.com/mr. Sprint PCS is a wholly-owned tracking group of Sprint Corporation trading on the NYSE under the symbol "PCS." Sprint is a global communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. with more than 80,000 employees worldwide and $26 billion in annual revenues and is widely recognized for developing, engineering and deploying state-of-the art network technologies. This press release contains statements about future events and expectations that are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Any statement in this press release that is not a statement of historical fact may be deemed to be a forward-looking statement, which involves known and unknown risks, uncertainties and other factors which may cause the company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. For example, projections of net adds, ARPU, churn, CPGA, roaming revenue and expense, and EBITDA losses may prove inaccurate due to factors such as the impact of competition, the availability of handsets and delays in our network build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. . For further information on the risks inherent in Horizon PCS' business see "Risk Factors" in our most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 10-Q filings.
HORIZON PCS, INC.
Consolidated Balance Sheets
March 31, December 31,
ASSETS 2002 2001
------------- -------------
Current Assets: (Unaudited)
Cash and cash equivalents $ 195,870,817 $ 123,775,562
Restricted cash 24,597,222 24,597,222
Accounts receivable - subscriber 17,315,739 14,293,771
Receivable from affiliate 99,451 100,437
Receivable from Parent -- 483,785
Equipment inventory 1,802,381 3,845,433
Prepaid expenses and other current
assets 2,671,494 840,970
------------- -------------
Total current assets 242,357,104 167,937,180
------------- -------------
Other Assets:
Restricted cash 24,062,500 24,062,500
Intangible asset - Sprint PCS licenses,
net of amortization 42,225,701 42,840,534
Goodwill, net of amortization 7,191,180 7,191,180
Unamortized debt issuance costs and
other assets 23,227,707 24,438,992
------------- -------------
Total other assets 96,707,088 98,533,206
------------- -------------
Property and Equipment, Net 230,290,376 214,867,858
------------- -------------
Total assets $ 569,354,568 $ 481,338,244
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities:
Accounts payable $ 8,544,723 $ 9,500,931
Accrued liabilities 34,881,585 27,527,462
Payable to Sprint PCS 16,892,532 10,244,529
Deferred service revenue 4,326,977 3,712,734
------------- -------------
Total current liabilities 64,645,817 50,985,656
------------- -------------
Other Long-term Liabilities:
Long-term debt 495,410,215 384,055,643
Other long-term liabilities 2,252,524 2,195,355
Deferred income 9,847,400 10,719,888
------------- -------------
Total other long-term liabilities 507,510,139 396,970,886
------------- -------------
Total liabilities 572,155,956 447,956,542
------------- -------------
Commitments and Contingencies -- --
Convertible Preferred Stock 148,205,412 145,349,043
Stockholders' Equity (Deficit):
Preferred stock -- --
Common stock - class A 3 3
Common stock - class B 5,846 5,846
Treasury stock - class B (111,061) (111,061)
Accumulated other comprehensive
income (loss) (447,908) (837,851)
Additional paid-in capital 91,852,117 91,852,117
Deferred stock option compensation (1,389,259) (1,566,496)
Retained deficit (240,916,538) (201,309,899)
------------- -------------
Total stockholders' equity (deficit) (151,006,800) (111,967,341)
------------- -------------
Total liabilities and
stockholders' equity (deficit) $ 569,354,568 $ 481,338,244
============= =============
HORIZON PCS, INC.
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31,
----------------------------
2002 2001
------------ ------------
Operating Revenues:
Subscriber revenues $ 35,015,205 $ 12,063,233
Roaming revenues 10,819,288 6,114,459
Equipment revenues 2,375,289 1,075,965
------------ ------------
Total operating revenues 48,209,782 19,253,657
------------ ------------
Operating Expenses:
Cost of services (exclusive of
items shown below) 35,750,809 17,981,365
Cost of equipment 4,919,595 2,189,910
Selling and marketing 14,707,221 7,096,031
General and administrative (exclusive
of items shown below) 9,175,049 4,589,000
Non-cash compensation 177,237 177,237
Depreciation and amortization 7,949,631 3,414,043
------------ ------------
Total operating expenses 72,679,542 35,447,586
------------ ------------
Operating loss (24,469,760) (16,193,929)
Loss on sale of property and equipment (285,738) --
Interest income and other, net 743,636 2,886,220
Interest expense, net (12,738,408) (6,150,947)
------------ ------------
Loss on operations before income
tax expense (36,750,270) (19,458,656)
Income tax expense -- --
------------ ------------
Net loss (36,750,270) (19,458,656)
Preferred stock dividend (2,856,369) (2,635,623)
------------ ------------
Net loss available to common
stockholders $(39,606,639) $(22,094,279)
============ ============
Basic and diluted loss per share
available to common stockholders $ (0.68) $ (0.38)
============ ============
Weighted-average common shares
outstanding 58,471,934 58,471,934
============ ============
HORIZON PCS, INC.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31,
----------------------------
2002 2001
Cash Flows From Operating Activities: ------------ ------------
Net loss $(36,750,270) $(19,458,656)
------------ ------------
Adjustments to reconcile net loss of net
cash used in operating activities:
Depreciation and amortization 7,949,631 3,414,043
Non-cash compensation expense 177,237 177,237
Non-cash interest expense 6,118,482 4,490,700
Provision for doubtful accounts 3,511,642 730,720
Loss on hedging activities 34,103 --
Loss on sale of property and
equipment 285,738 --
Change in:
Accounts receivable (6,533,610) (2,698,156)
Equipment inventory 2,043,052 981,829
Prepaid expenses and other (1,830,524) 44,710
Deferred income (872,488) 849,397
Accounts payable (956,208) 1,591,756
Payable to Sprint PCS 6,648,003 (774,336)
Accrued liabilities and deferred
service revenue 7,968,366 (8,263,720)
Change in receivable / payable
from affiliates and Parent 484,771 (247,656)
Change in other assets and
liabilities, net 1,002,160 (487,969)
------------ ------------
Total adjustments 26,030,355 (191,445)
------------ ------------
Net cash used in operating
activities (10,719,915) (19,650,101)
------------ ------------
Cash Flows From Investing Activities:
Capital expenditures, net (23,438,012) (32,053,689)
Cash investments -- (31,976,767)
Proceeds from redemption of RTFC
capital certificates -- 2,895,646
Proceeds from the sale of property
and equipment 1,253,182 --
Dividends received -- (4,311)
------------ ------------
Net cash used in investing
activities (22,184,830) (61,139,121)
------------ ------------
Cash Flows From Financing Activities:
Deferred financing fees and other -- (41,915)
Long-term debt -- borrowings, net
of repayments 105,000,000 --
------------ ------------
Net cash provided by financing
activities 105,000,000 (41,915)
------------ ------------
Net Increase (Decrease) in Cash and
Cash Equivalents 72,095,255 (80,831,137)
Cash and Cash Equivalents, Beginning
of Period 123,775,562 191,417,394
------------ ------------
Cash and Cash Equivalents, End
of Period $195,870,817 $110,586,257
============ ============
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